Shareholders have bemoaned the Federal Government’s inability to implement the policy stopping the removal of stamp duty and Value Added Tax (VAT) on capital market transactions. The policy removing stamp duty and VAT on capital market trading was announced in December 2012.
According to some capital market stakeholders, the policy ought to have come into force after more than one year of government pronouncement on it. The shareholders said that contrary to the pronouncements of the Coordinating Minister of the Economy and Minister of Finance, Dr Ngozie Okonjo-Iweala, on the policy, they were still paying VAT and stamp duties.
The Federal Government, had in December 2012, directed that stamp duties and VAT should be removed on capital market transactions. Okonjo-Iweala said then that the decision was part of government efforts to improve transactions in the capital market.
She had described the 12 per cent VAT and seven per cent stamp duties as disincentives to investment in the capital market.
Mr Bayo Adeleke, National Secretary, Independent Shareholders Association of Nigeria (ISAN), said that the pronouncements, without a legal backing were not enough?
Adeleke said that government should match its words with action, noting that; non-implementation of the policy was a threat to investor confidence.
According to him, investors are wary of policy pronouncements that are not followed through. “Pronouncements are not enough. There must be a process of transmitting it as a government policy,” Adeleke said.
He said that the policy, if implemented, would make the market flexible, attractive and less expensive. Alhaji Gbadebo Olatokunbo, founding member, Nigeria Shareholders Solidarity Association, called for a quick resolution of the issue. Olatokunbo said that government should live by example by ensuring that the pronouncements are quickly gazetted, in the interest of the market. He said that all hands must be on deck to move the market forward.
Ms Arunma Oteh, SEC Director-General, said recently at the 2014 first quarter Capital Market Committee meeting that gazetting the policy was the major impediment.
Oteh said that the policy would not be implemented until it was gazetted by the Federal Government.
The Director-General also said that the policy needed the consent of the Attorney General of the Federation and the Federal Inland Revenue Services (FIRS). She added that the commission was working closely with all the necessary stakeholders to ensure the implementation of the policy.
